Automotive News Canada - November 2019 - 6

* N O V E M B E R 2 019

National 10% surtax
on luxury vehicles tops
post-election concerns

TRENDING
STORIES

If implemented,
the Liberal tariff -
added to all current
taxes - could affect
30,000 sales a year;
NDP opposition also
seeks an industry
strategy and
USMCA changes

PSA-FCA
MERGER
While the two automakers have agreed to join forces to create the

By ROBERT BOSTELAAR
O T TAWA C O R R E S P O N D E N T

and GST would add $72,000 to the
price of a $200,000 vehicle in B.C.
"You might as well close up the
McLaren store in Vancouver. I
can't imagine the business sustaining itself."
NDP MP Brian Masse, the party's industry critic, said the party
will want to review details but
he could "definitely" see the tax
passing, especially since it will
mainly affect foreign vehicles and
not Canadian-built cars.
The levy is just one auto sector issue in which the Liberals
will need backing from the NDP,
which emerged from the Oct. 21
federal election with 15 fewer
seats but vastly more power after
the Trudeau government failed to
win a majority.
Among others:

AUTO ISSUES THAT RECEIVED
limited play in the run-up to the
Oct. 21 federal election could
loom large in Canada's 43rd
Parliament,
starting with
NEWS ANALYSIS a promised
10-per-cent
luxury tax the country's car dealFREE-TRADE FINISH LINE
ers say could affect 30,000 sales.
Last to sign on to the hardPart of the Liberal platform
fought deal to replace NAFTA,
announced in September, the tax
Canada could also be last to ratify
on vehicles over $100,000 appears
the United States-Mexico-Canada
likely to get the New Democratic
Agreement. Still,
Party support Justin
approval is broadly
Trudeau's minority
expected when the deal
government will need
reaches Parliament,
to pass laws, even to
which could happen
stay in power.
soon if Democrats in
The levy is already
the United States win
raising fears among
the labour and envidealers of high-end
ronmental revisions
vehicles.
they're demanding
"It would gravely
for ratification, and if
affect our business,"
Mexico agrees to the
said Pfaff Automotive
new language.
Partners CEO Chris
Masse said NDP
Pfaff, whose TorontoBrian Masse,
support will hinge on
based group includes
NDP auto critic,
those revisions, which
Porsche, Audi,
can "definitely"
he suggests would benBMW, Mercedes and
see the new
efit manufacturing
Liberal luxury
McLaren brands.
in Canada by making
tax passing.
Pfaff said the
PHOTO: SUPPLIED
Mexico less attractive
impact will be felt
BY BRIAN MASSE
as a low-cost site for
most by the people
manufacturing plants.
who sell and repair
Barring major disappointluxury cars.
ments in the amendments, howCanadian Automobile Dealers
ever, the party is unlikely to vote
Association economist Oumar
against USMCA and risk forcing
Dicko has calculated the tax,
an early election for which it is
which would raise $600 million
unprepared.
a year, will target more than 92
models and directly affect 30,000
A PLAN FOR AUTO INVESTMENT
annual sales. The tax also would
The NDP was the only party to
apply to other purchases, includpitch a national auto strategy in
ing boats and planes for noncomits platform, said Masse.
mercial use.
"The Liberals and the
"We are very concerned that
Conservatives did not propose
the proposed tax will impact the
anything significant for the auto
investment that dealers have
or manufacturing sector in this
already made, and with the
election."
unprecedented disruption and
Expect the NDP to renew its
changes in our industry, the luxucall for a national plan when
ry tax will add an additional burParliament resumes. Its stratden on the industry as a whole,"
egy, building on recommendasaid Dicko
The burden could be highest in tions from a 2018 report by forBritish Columbia, where it would mer Toyota Motor Manufacturing
Canada head Ray Tanguay, would
combine with provincial taxes
include consultations with busiof 15 per cent on vehicles with
ness and labour and set aside $300
a transaction price of $125,000
million to spur investment in a
to $149,999, and 20 per cent for
sector steadily losing production
$150,000 and above.
jobs.
Pfaff said the luxury taxes

You might as well close
up the McLaren store
in Vancouver. I can't
imagine the business
sustaining itself.
CHRIS PFAFF

CEO of Toronto-based Pfaff
Automotive Partners, commenting
on the potential of a 10 per cent
federal luxury-car tax on top of
the tiered 15 and 20 per cent tax
unique to British Columbia

FUEL CONSUMPTION, PART 1

Canada has inserted itself into
the battle between U.S. President
Donald Trump and California
over fuel-economy standards set
by the previous Obama administration. The Liberal government
signed a memorandum of understanding with California in June
to align with the state's targets
and zero-emission-vehicle program.
That agreement notwithstanding, there is little this country can do if the Trump government succeeds in easing the limits for 2021-2025 vehicles. Canada
has long moved in lockstep with
the United States on emissions
standards and lacks the clout to
require tougher limits for cars
sold north of the border.
For its part, Canada's auto
industry is pressing for one set of
standards across the continent.

FUEL CONSUMPTION, PART 2

In the longer term, the government wants all vehicles sold
in Canada to be zero emission by
2040. It's an ambitious target that
will likely require more than the
rebates of up to $5,000 in place
since May for certain vehicles.
Again, the NDP stands
ready to back additional measures, that is if they're part of
a national auto strategy and
favour Canadian-built models.
Chrysler's Pacifica is currently
the only vehicle made in Canada
that qualifies for a rebate.
"There should be a weighted strategy for domestic vehicles
and for multi-passenger vehicles
that have better environmental impact, especially for urban
areas," Masse said.
"If their policy is going to be
centred, which it is right now, on
buying foreign vehicles, we don't
support that." - ANC
- Toronto Bureau Reporter John
Irwin contributed to this report.

automotivenews.ca

ONGOING WEB COVERAGE
world's fourth-largest automaker, there are plenty of moving parts
and interested parties, including the White House, which says it
will keep a watchful eye over the proceedings.

STILL
NO USMCA
Even though U.S. politicians insist they are closer to a vote,

Canada must also follow suit. And then it will take time for the
deal to come into effect.

GENESIS TO GET BRAND BOOST, NEW SUVs

Yong-woo "William" Lee has been tapped as the new global
head of premium brand, and he'll tackle big expansions into new
segments and markets, including Canada. He'll also address
the brand's low consumer awareness. Lee takes over at a critical
time for Genesis as it builds out
its U.S. sales network, embarks
on the rollout of the brand's first
PHOTO: GENESIS
crossovers and eyes more expansion in Canada, Russia, the Middle East and Australia. Sales
of the three-sedan lineup, while climbing, are still meagre. U.S.
volume was up 67 per cent to 14,909 units through September.
Sales are up 14 per cent to 1,313 units in Canada. Key to
increasing sales and awareness will be the addition of two crossovers: a midsize GV80 that could arrive next spring or summer,
and a compact GV70 expected in 2021.

NO BRONCO PHOTOS, BUT LOGO RELEASED

MORE THAN TWO AND A HALF YEARS AFTER FORD
announced it will revive the off-road nameplate, the automaker still hasn't shown what the Bronco
might eventually look like. However,
the vehicle finally has a logo and a
vague release date. Ford on Nov. 1
said that the long-awaited off-roader
will debut in spring 2020. The company gave no other details, but the vehiI L L U S T R AT I O N : F O R D
cle isn't expected to go on sale until late
2020 as a 2021 model-year vehicle. Ford revealed an updated
bucking-horse logo and a teaser video that showed the Bronco's
evolution through the years.

VW'S TIMELINE FOR EV 'FAMILY' IN CANADA

THE NEXT-GENERATION VOLKSWAGEN GOLF AND THE
automaker's first ID.-badged EV will arrive in Canada in late
2021, VW Canada confirmed in late
October. The upcoming eighth-generation Golf, which will be sold as a
2022-model-year vehicle, has a long
nose, narrow headlight design and
prominent shoulder sections.
P H O T O : V O L K S WA G E N
VW Canada recently convinced the
automaker to continue offering the base-model Golf after the
redesign, despite plans to cut base versions in the United States.
The e-Golf is slated to go away and be replaced with a vehicle under the automaker's ID. badge. "It will be replaced by the
ID. Family of all-electric cars based upon the MEB platform," the
company said. "The first ID. car in Canada will be the production
version of the ID. Crozz concept, which will arrive early in 2021."

1,200 NON-GM WOKERS AFFECTED BY GM

UNIFOR HAS SIGNED CLOSURE AGREEMENTS AT FOUR
autoparts and service companies in connection with the decision
by General Motors to close Oshawa Assembly.
The union says the deals with Inteva Products, Lear Corp.
Whitby, Auto Warehousing Canada and Robinson Solutions provide for improved severance packages for employees over the
legislated minimum. "In the end, we successfully negotiated double the Employment Standards Act minimum severance from
the...employers," Colin James, Unifor Local 222 president, said
in a statement. Unifor says they are the last of 11 such agreements - covering 1,200 workers represented by Unifor - it has
negotiated at companies affected by the end of vehicle assembly
at GM Oshawa. - ANC

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Automotive News Canada - November 2019

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